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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Why fluctuating Market Turnover?

Why fluctuating Market Turnover?

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1Why fluctuating Market Turnover? Empty Why fluctuating Market Turnover? Thu Feb 18, 2021 10:07 am

RJ1010


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Here’s a question to gather everyone’s thoughts. Last 4 months we witnessed a remarkable change in the CSE daily turnover. It was in 1-2Bn... moved up to 4-5Bn... and went over 10Bn per day during the frenzied bull days and now back to 4-5Bn on red days.

Question is from where did all that money suddenly flood the market and where’s that money now?

My assumptions... these are only my guesses as I don’t know the answer.
1. EPF did take profit and capital out of several of their investments. These would have contributed to a large % of the turnover. As per records they are yet to reinvest, so we may see money coming back into CSE soon.
2. There’s rumours of black money infusion and making it white.. which means black money was used to buy shares at low and cash out with profits. Which means this money has come and gone. I doubt this rumour but cannot rule out bcz it’s Sri Lanka. If it’s black money aren’t the tax authorities going to investigate from where the money originated? Hmm...
3. The large money infusion may have been contributed by the credit taken by the large number of new investors. The repercussions we are seeing now.
4. During the short bull run, cash in was higher than cash out and turnover hit record billions. When red days came cash out was higher but turnover dropped. Which means money which came into CSE has not all gone out. Most of it is still inside CSE. It will take a lot more red days for that cash to be taken out if that happens.

The situation could be a combination of all of the above.
Share your thoughts and any other ideas.

samaritan, judecroos and geesura like this post

2Why fluctuating Market Turnover? Empty Re: Why fluctuating Market Turnover? Thu Feb 18, 2021 10:43 am

xhunter

xhunter
Moderator
Moderator
This is not the answer, this a sort of explanation to misconception we have.
Actually in green days, cash exit from the market and red days’ cash “accumulated” to the market.
So all that run after jan 8th  , with that heavy turnover lot of cash were taken out from the market. I don’t know whether it will come back or not.
(don’t get confused with market capital value).
 
I will explain,
I get a share at 100/=. On a green day I sell it to 120/= , so someone injected 120/=. I left with that 120/=
Again share will be traded at its fair price 100/= but that 20/= is gone.


the person who bought that share at 120/=, actually didnt injected cash to the market, he gave that to me. market still has that share (not 120/=) , that share price will be decided by a buyer and seller agreement next day.



Last edited by xhunter on Thu Feb 18, 2021 10:58 am; edited 1 time in total

soileconomy and RJ1010 like this post

3Why fluctuating Market Turnover? Empty Re: Why fluctuating Market Turnover? Thu Feb 18, 2021 10:49 am

RJ1010


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
5. An idea shared by Slstocks fb post - big investors are recycling their money instead of holding their investments. For example investor A has 50M in Expo. Instead of keeping money invested for long term he uses that 50M to buy low sell high and quickly jumps to another moving share like BILL and uses the same 50M to quickly buy/sell. He recycles his money to earn profits. So turnover goes up but the capital remains the same for the investor. At the end he may still keep the money in CSE or takes out his money and wait to collect in red days such as these days. Hope I interpreted Slstocks point correctly.

judecroos and thananjey like this post

4Why fluctuating Market Turnover? Empty Re: Why fluctuating Market Turnover? Thu Feb 18, 2021 12:44 pm

xhunter

xhunter
Moderator
Moderator
@RJ1010 wrote:Here’s a question to gather everyone’s thoughts. Last 4 months we witnessed a remarkable change in the CSE daily turnover. It was in 1-2Bn... moved up to 4-5Bn... and went over 10Bn per day during the frenzied bull days and now back to 4-5Bn on red days.

Question is from where did all that money suddenly flood the market and where’s that money now?

My assumptions... these are only my guesses as I don’t know the answer.
1. EPF did take profit and capital out of several of their investments. These would have contributed to a large % of the turnover. As per records they are yet to reinvest, so we may see money coming back into CSE soon.
2. There’s rumours of black money infusion and making it white.. which means black money was used to buy shares at low and cash out with profits. Which means this money has come and gone. I doubt this rumour but cannot rule out bcz it’s Sri Lanka. If it’s black money aren’t the tax authorities going to investigate from where the money originated? Hmm...
3. The large money infusion may have been contributed by the credit taken by the large number of new investors. The repercussions we are seeing now.
4. During the short bull run, cash in was higher than cash out and turnover hit record billions. When red days came cash out was higher but turnover dropped. Which means money which came into CSE has not all gone out. Most of it is still inside CSE. It will take a lot more red days for that cash to be taken out if that happens.

The situation could be a combination of all of the above.
Share your thoughts and any other ideas.
1.     When market goes upwards active party is the buying side, not the selling side.so if it EPF selling’s, it doesn’t explain what happened. Then who was the buyer? That is the party who throws money, question is where that money came from.
2.      If black money used and exit with profit, still that same question is there, who was the buyer, and where that money came from?
But this is possible, they used black money to buy, and sellers also their side, they can play and move away with money (but with a loss, that’s natural in money laundering always that process lose money). But money laundering in this way is not practice and it is traceable.
 
3.      Most probable, but we need facts that the contribution of “crossing” for that huge turnover.
4.     This is I explained in my previous post

judecroos likes this post

5Why fluctuating Market Turnover? Empty Re: Why fluctuating Market Turnover? Thu Feb 18, 2021 2:41 pm

Equityinvestor


Manager - Equity Analytics
Manager - Equity Analytics
@xhunter wrote:
@RJ1010 wrote:Here’s a question to gather everyone’s thoughts. Last 4 months we witnessed a remarkable change in the CSE daily turnover. It was in 1-2Bn... moved up to 4-5Bn... and went over 10Bn per day during the frenzied bull days and now back to 4-5Bn on red days.

Question is from where did all that money suddenly flood the market and where’s that money now?

My assumptions... these are only my guesses as I don’t know the answer.
1. EPF did take profit and capital out of several of their investments. These would have contributed to a large % of the turnover. As per records they are yet to reinvest, so we may see money coming back into CSE soon.
2. There’s rumours of black money infusion and making it white.. which means black money was used to buy shares at low and cash out with profits. Which means this money has come and gone. I doubt this rumour but cannot rule out bcz it’s Sri Lanka. If it’s black money aren’t the tax authorities going to investigate from where the money originated? Hmm...
3. The large money infusion may have been contributed by the credit taken by the large number of new investors. The repercussions we are seeing now.
4. During the short bull run, cash in was higher than cash out and turnover hit record billions. When red days came cash out was higher but turnover dropped. Which means money which came into CSE has not all gone out. Most of it is still inside CSE. It will take a lot more red days for that cash to be taken out if that happens.

The situation could be a combination of all of the above.
Share your thoughts and any other ideas.
1.     When market goes upwards active party is the buying side, not the selling side.so if it EPF selling’s, it doesn’t explain what happened. Then who was the buyer? That is the party who throws money, question is where that money came from.
2.      If black money used and exit with profit, still that same question is there, who was the buyer, and where that money came from?
But this is possible, they used black money to buy, and sellers also their side, they can play and move away with money (but with a loss, that’s natural in money laundering always that process lose money). But money laundering in this way is not practice and it is traceable.
 
3.      Most probable, but we need facts that the contribution of “crossing” for that huge turnover.
4.     This is I explained in my previous post

I also agree with xhunter about point 3. This is most probable. However the question is whether such new investors got so much credit, all most all days were 5 BIL plus!!!

Black money - I dont think the people who bring in black money (whom i belive would have strong ties with political big shots) would worry about somone tracing or taxes. 

Not sure if point 1 is valid.

judecroos likes this post

6Why fluctuating Market Turnover? Empty Re: Why fluctuating Market Turnover? Thu Feb 18, 2021 2:58 pm

judecroos


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@xhunter wrote:
@RJ1010 wrote:Here’s a question to gather everyone’s thoughts. Last 4 months we witnessed a remarkable change in the CSE daily turnover. It was in 1-2Bn... moved up to 4-5Bn... and went over 10Bn per day during the frenzied bull days and now back to 4-5Bn on red days.

Question is from where did all that money suddenly flood the market and where’s that money now?

My assumptions... these are only my guesses as I don’t know the answer.
1. EPF did take profit and capital out of several of their investments. These would have contributed to a large % of the turnover. As per records they are yet to reinvest, so we may see money coming back into CSE soon.
2. There’s rumours of black money infusion and making it white.. which means black money was used to buy shares at low and cash out with profits. Which means this money has come and gone. I doubt this rumour but cannot rule out bcz it’s Sri Lanka. If it’s black money aren’t the tax authorities going to investigate from where the money originated? Hmm...
3. The large money infusion may have been contributed by the credit taken by the large number of new investors. The repercussions we are seeing now.
4. During the short bull run, cash in was higher than cash out and turnover hit record billions. When red days came cash out was higher but turnover dropped. Which means money which came into CSE has not all gone out. Most of it is still inside CSE. It will take a lot more red days for that cash to be taken out if that happens.

The situation could be a combination of all of the above.
Share your thoughts and any other ideas.
1.     When market goes upwards active party is the buying side, not the selling side.so if it EPF selling’s, it doesn’t explain what happened. Then who was the buyer? That is the party who throws money, question is where that money came from.
2.      If black money used and exit with profit, still that same question is there, who was the buyer, and where that money came from?
But this is possible, they used black money to buy, and sellers also their side, they can play and move away with money (but with a loss, that’s natural in money laundering always that process lose money). But money laundering in this way is not practice and it is traceable.
 
3.      Most probable, but we need facts that the contribution of “crossing” for that huge turnover.
4.     This is I explained in my previous post
Black money is our hard earned  TAX money , robed in many ways. every body know who are these people ??? One thing is sure in my mind the Mother nature will punish all of them to vanish with their families from this earth. Even a smell will not remain in this land.100%.

7Why fluctuating Market Turnover? Empty Re: Why fluctuating Market Turnover? Thu Feb 18, 2021 10:03 pm

snipo


Equity Analytic
Equity Analytic
Not sure whether the above was mentioned implicitly, but it could also be that due to the bull run, lots of new investors also injected a lot of money. However, as prices have dropped drastically, there must be quite a few investors who have been stuck with stocks, that were bought at higher prices (myself victim as well). So obviously, the ability to trade is constrained, and as you all know, daily turnover increases with the number of trades. Trading volumes have dropped markedly and is unlikely to see an increase until the market recovers to levels observed in January. Also, those who burnt their hands and lost money are unlikely to return to the CSE for a while (another limitation)...

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